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  3. discuss the argument whether lumpsum is 100% risk

Discuss the argument whether lumpsum is 100% risk free for the owner or not with an example.

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Civil Engineering

Discuss the argument whether lumpsum is 100% risk free for theowner or not with an
example.

Answer & Explanation Solved by verified expert
4.3 Ratings (919 Votes)
For risk free equity investment you can follow either of two approaches depending on whether your investment is a lump sum or SIP at regular intervals I prefer lump sum investment as it is not speculative On the other hand SIP approach is similar to the investment strategy of capital protection funds Lets understand a Lump Sum Investment In this case i will invest 100 investable amount under 100 safe and secure financial instrument In the case of a fixed deposit i will opt for monthly interest payout In the case of Arbitrage Mutual Fund i will opt for Systematic Withdrawal Plan The key point to consider is that you have to take care of taxation part Depending on your tax slab you may opt for FD or Arbitrage Mutual Funds The people who are in the lower tax bracket of 10 may choose for FD An investor who is in 20 or 30 tax bracket may opt for Arbitrage    See Answer
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